(a) A trading company has presented the following information: Months January February March April Sales in Rs. 800,000 700,000 600,000 6,000,000 The…
BBS Cost and Management Accounting · 2080 · Solved Question with Answer
(a) A trading company has presented the following information:
| Months | January | February | March | April |
| Sales in Rs. | 800,000 | 700,000 | 600,000 | 6,000,000 |
The gross profit margin on sales will be 40%. The merchandize inventory will be equal to meet next months sales need. The operating expenses and selling expenses will be 10% and 20% of sales revenue respectively including depreciation 10,000 per month.
**Required**:
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Merchandize purchase budget for 1st three months ending March
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Operating and selling expenses budget for 1st three months ending March [3+2=5];
(b) What is standard costing? Explain any two difference between standard cost and estimated cost. [5]